Final Thoughts
Final Thoughts
Written by Tim Triplett
March 26, 2021
Sky-high prices not just for steel, but for construction materials of all kinds, are threatening the prospects for construction demand. And federal infrastructure spending proposed by the Biden administration could carry an even heftier price tag for taxpayers.
The Associated General Contractors of America reports that the construction industry is experiencing an unprecedented mix of steeply rising materials prices, snarled supply chains and staffing difficulties, combined with slumping demand that threatens to push some contractors out of business and is adding to the industry’s nearly double-digit unemployment rate. The ship blocking the Suez Canal halfway round the world is even having an impact here close to home as hundreds of vessels are prevented from delivering their goods, including various construction-related materials.
In a Construction Inflation Alert posted by AGC last week, the trade group called for immediate action by federal officials to end tariffs and quotas that are adding to price increases and supply shortages. Officials at all levels of government need to identify and remove or lessen any unnecessary or excessive impediments to the importation, domestic production, transport, and delivery of construction materials and products, AGC said.
AGC Chief Economist Ken Simonson will get into more detail on the state of construction and the many challenges the industry faces as the featured speaker during Steel Market Update’s next Community Chat webinar beginning at 11 a.m. ET on Wednesday, March 31.The webinar is free and open to all. To register, click here.
Also on Wednesday, President Biden is scheduled to unveil details of his multi-trillion-dollar infrastructure program—the next step in his plan to rescue the economy from COVID-19. With the condition of the nation’s roads and bridges earning a weak C- from the American Society of Civil Engineers, it’s easy for steel and other industries to get behind a new infrastructure initiative. But Biden’s plan goes far beyond concrete and asphalt. His vision for “building back better” includes improvements to railways and ports, the electrical grid, 5G telecommunications and a massive shift toward green energy—not all of which are highly steel intensive. And any new steel demand that results could be many months, if not years, away.
Infrastructure spending is not without its detractors. Many believe it’s unwise to double down on infrastructure so soon after spending trillions to keep the economy afloat through the pandemic. And there are those who contend the need, and the potential payoff, from a massive infrastructure program has been greatly exaggerated. With the economy already well on its way to recovery, perhaps it’s time for some fiscal responsibility, they argue.
Every new administration pledges to make infrastructure work, and the jobs it creates, a top priority. And every time, the cost and the politics undermine the true potential for progress. Even with the Democrats in control of Congress and the White House this time, history is likely to repeat itself. Then again, never before in history (with the possible exception of the Great Depression) has the U.S. had as powerful an incentive as the COVID pandemic to get this right.
As always, your business is truly appreciated by all of us here at Steel Market Update.
Tim Triplett, Executive Editor
Tim Triplett
Read more from Tim TriplettLatest in Final Thoughts
Final Thoughts
We joked in our last Final Thoughts that Wiley trade attorney Tim Brightbill – one of the nation’s leading experts on trade law and policy – would probably be revising his presentation on Trump, trade policy, and tariffs for the Tampa Steel Conference. He did. And even after those last-minute revisions, he actually got trumped […]
Final Thoughts
The whole SMU team is packing up our laptops and our SMU polos/cardigans, loading up the PowerPoint slides, and preparing to make the trek down to Florida for the Tampa Steel Conference. There will be plenty to talk about!
Final Thoughts
From one group of folks, I’ve heard that Trump might not wait until Feb. 1 – the date he threatened on to place tariffs on China, Canada, and Mexico. They say he could act as soon as Friday. And then there are those who don’t think anything will happen before April 1. That’s the deadline for Commerce, Treasury, and USTR to submit key reports on “America First Trade Policy” to President Trump.
Final Thoughts
Trump made a clarification in a speech on Monday. Previously, he had declared the word “tariff” the most beautiful word in the dictionary. No longer.
Final Thoughts
President Donald Trump on Sunday hammered Colombia with 25% tariffs and threatened to increase them to 50%. Trump in a post on Truth Social said he took the action not because of a trade dispute but because the South American nation had refused to accept planes carrying deported immigrants. The president also cited "national security" concerns, just as he did to justify 25% Section 232 tariffs on steel in his first term. Even the 50% threat echoes his first term. Turkish steel, like that of most nations, was assessed a 25% tariff in March 2018. Trump doubled Turkey's tariff to 50% via a tweet in August of that year over a matter unrelated to steel.